GBP/USD: volatility risk premium to record levels - Nomura
|Analysts at Nomura explained that global equities have declined this week, as risk aversion on the UK referendum takes hold, despite a more dovish Fed.
Key Quotes:
"Volatility risk premium (implied vol minus realised vol) has shot up in GBP/USD to levels not seen before, and in European stock markets volatility risk premium is similar to what occurred during the various euro crises in 2010 and 2012.
Whatever the outcome, it is unlikely to come as a complete surprise to markets and any bouts of broader market risk aversion will likely be short-lived.
Shortterm volatility on the day/night of the referendum will likely be high—see our guide to trading the referendum here. We also think the SNB would be ready to intervene on a Brexit vote (though this outcome is not our base case)."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.